Growth in developing East Asia and Pacific (EAP) continues to be resilient and in line with previous expectations. Already robust domestic demand has been supported by some pickup in external demand and the gradual recovery in commodity prices.
... See More + Fiscal deficits in the major regional economies widened in 2016, prompting some adjustment toward the end of the year in Indonesia and Malaysia. Monetary policies remained accommodative, and credit continued to grow rapidly in most major economies. Inflation is edging up and producer prices are rising quickly as commodity prices increase. Capital outflows intensified toward end-2016 leading to depreciation pressures, but financial markets have since recovered. The growth outlook for 2017–19 remains broadly positive across the region. China is expected to continue its gradual transition to lower, more sustainable growth. In the rest of the region, growth is projected to pick up moderately. Continued buoyancy in domestic demand, including public and increasingly private investment, will be supported by gradually strengthening external demand. Global growth and commodity prices are projected to continue recovering slowly, while global financial conditions tighten gradually. Inflationary pressures should remain contained. In the Pacific Island Countries, maintaining fiscal sustainability needs to remain a focus along with policy reforms in selected sectors, which could prove transformational over the medium term. For fiscal sustainability, efforts to shore up revenues, contain unproductive spending while boosting critical expenditures on health and education, and build up buffers against shocks need to be sustained. There are also opportunities to accelerate growth and boost employment over the longer term. On tourism, promising options include tapping into the Chinese and retiree market, increasing the number of luxury resorts, and encouraging cruise ships to base in the Pacific. Increases in labor mobility, through the expansion of existing agreements and the negotiation of new agreements, complemented by investments in workers’ human capital, could also generate substantial benefits. Higher mobile and internet penetration, complemented by a conducive business environment and the development of a skilled workforce could boost productivity. And income from fisheries could be significantly increased, without threatening the sustainability of the fisheries stock, by broadening participation in cooperative agreements to include East Asian countries with major fishing grounds, such as the Philippines and Indonesia, and ensuring compliance with robust catch limits.
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In the six months since the previous East Asia and Pacific (EAP) economic update, developing EAP has faced a challenging external environment. Financial market conditions in the region, however, have been volatile over much of the past 6 months, as in the rest of the world.
... See More + Over the next two to three years, growth in developing EAP is expected to ease modestly. Poverty in developing EAP has declined rapidly in recent years, and is projected to fall further with continued growth; however, in several countries the pace of poverty reduction has been restricted by limited labor market opportunities, particularly for disadvantaged groups. The positive outlook for growth and poverty reduction in the region in this base case is subject to elevated risks. The outlook for the Pacific Island Countries (PICs) is heavily dependent on their ability to overcome geographic constraints and take advantage of the relatively narrow set of opportunities available to them. Sustaining the pace of poverty reduction will require measures to enhance the business environment, improve education and health outcomes, and strengthen social safety nets.
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This systematic country diagnostic (SCD) identifies the key constraints and opportunities to reducing poverty and promoting shared prosperity in a sustainable manner for eight small Pacific island countries (PIC8): Kiribati, the Federated States of Micronesia, Marshall Islands, Palau, Samoa, Tonga, Tuvalu, and Vanuatu.
... See More + This report aims to address that by using country‐specific analysis to produce conclusions at multiple levels: either for the whole PIC8 region, for sub‐groupings, or for individual countries. The World Bank Group is committed to helping developing countries achieve the twin goals of ending extreme poverty and boosting shared prosperity in a sustainable manner. The SCD begins with a context‐setting diagnostic of overarching constraints, which situates the challenges of the twin goals of ending absolute poverty and promoting shared prosperity within the very specific context of the Pacific in chapter one. The SCD examines the incidence and profile of poverty and shared prosperity in the Pacific, in order to understand their characteristics and drivers in chapter two. The third aspect of the framework is the identification of key pathways for ending poverty and boosting shared prosperity in chapter’s three to six. The SCD draws attention to crosscutting enablers of economic governance and the business environment in chapter seven. The SCD undertakes a process of prioritization of interventions that takes into account a broad view of the likelihood of success and focuses on those interventions that will have the biggest impact in achieving the twin goals in chapter eight.
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